[opendtv] News: Antipiracy Rule for Broadcasts Is Struck Down

From: Craig Birkmaier <craig@xxxxxxxxx>

To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>

Date: Mon, 9 May 2005 09:03:56 -0400

http://www.nytimes.com/2005/05/07/technology/07tele.html?th&emc=th
May 7, 2005
Antipiracy Rule for Broadcasts Is Struck Down
By STEPHEN LABATON
WASHINGTON, May 6 - A federal appeals court handed a major setback to
Hollywood and the television networks on Friday when it struck down
an antipiracy regulation requiring computer and television makers to
use new technology that would make it difficult for consumers to copy
and distribute digital programs.
The unanimous ruling by the three-judge panel, in an important case
at the intersection of intellectual property and technology, was a
stinging rebuke for the Federal Communications Commission. The court
said the commission exceeded its authority when it approved the rules
in 2003.
It was a significant victory for libraries, consumer groups and
civil liberties organizations. They had maintained that the
regulation, known as the broadcast flag rule, would stifle innovation
in technology and make it more difficult for consumers and users of
library services to circulate material legitimately.
Although an appeal is possible, lawyers involved in the case said the
fight would shift in the near term to Congress, which is already
weighing legislation. Hollywood executives and their lobbyists warned
that if the rule was not resurrected by Congress, studios and
broadcasters would sharply limit the digital programming available
over the airwaves, focusing instead on channels limited to cable and
satellite services, where they have other means to control what can
be copied.
The Supreme Court is expected to issue a ruling soon in another
closely watched case involving digital rights and intellectual
property, Metro-Goldwyn-Mayer Studios v. Grokster Ltd. In that case,
the court is considering whether the online services that enable
copyright songs and movies to be shared freely over the Internet can
be held liable themselves for copyright infringement.
The rule at issue in Friday's decision would have required
manufacturers to install special technology in new computers and
televisions that would enable them to recognize a "broadcast flag" -
specially embedded computer bits in the programs created by the
studios and the networks. The new equipment would then restrict
redistribution and reuse of the programs.
For years, the movie studios and television networks urged the
commission to adopt the rule, citing the recording industry's
experience with companies like Napster and saying restrictions on
copying and distributing programs by consumers were essential to the
transition from analog to digital television. They maintained that
without the imposition of the broadcast flag, shows would be copied
and then transmitted limitlessly through the Internet, much the way
music is.
But the critics said that the studios and networks were unduly
alarmist and that the new rule, which was to have taken effect July
1, would prevent consumers from copying and using programs for
legitimate reasons.
Research librarians submitted affidavits in the case contending that
the broadcast flag rule would make it impossible to distribute
broadcast clips and other research material over the Internet to
researchers and students.
Critics also maintained that the commission had overreached and had
moved to regulate the Internet more tightly, ridiculing the agency in
the aftermath of the rulemaking as the "federal computer commission."
The rule was challenged from the moment it was issued in November
2003. The case was filed last year in the United States Court of
Appeals for the District of Columbia, the usual venue for challenging
commission rules.
The outcome of the case was signaled during oral arguments in
February, when the judges aggressively questioned F.C.C. lawyers
about whether the agency had exceeded its authority by setting
technical standards having nothing directly to do with broadcasting
transmissions.
"You've gone too far," said Judge Harry T. Edwards during the oral
arguments, as he pressed a government lawyer to justify how the
agency could possibly set standards governing computers and the
Internet. "Are washing machines next?"
But the breadth of Judge Edwards's opinion was more than many lawyers
had expected.
"In this case, all relevant materials concerning the F.C.C.'s
jurisdiction - including the words of the Communications Act of 1934,
its legislative history, subsequent legislation, relevant case law,
and commission practice - confirm that the F.C.C. has no authority to
regulate consumer electronic devices that can be used for receipt of
wire or radio communication when those devices are not engaged in the
process of radio or wire transmission," Judge Edwards wrote.
"And the agency's strained and implausible interpretations of the
definitional provisions of the Communications Act of 1934 do not lend
credence to its position. As the Supreme Court has reminded us,
Congress 'does not ... hide elephants in mouse holes.' "His opinion,
in American Library Association v. Federal Communications Commission,
was joined by Judges David B. Sentelle and Judith W. Rogers.
David Fiske, the commission's top spokesman, said that the agency did
not have a comment about the decision and that the government had not
decided whether it would seek an appeal either to the full Court of
Appeals or to the Supreme Court. Some lawyers said it was unlikely
that the Supreme Court would consider the matter as the case did not
satisfy the criteria for such review.
The broadcast flag rule was adopted at the urging of Michael K.
Powell when he was commission chairman. It was supported by Kevin J.
Martin, a commissioner at the time who became chairman this year.
In recent weeks each side in the lawsuit has been talking to
lawmakers in anticipation of the ruling.
"Without a broadcast flag, consumers may lose access to the very best
programming offered on local television," said Edward O. Fritts,
chairman and chief executive of the National Association of
Broadcasters. "This remedy is designed to protect against
unauthorized indiscriminate redistribution of programming over the
Internet."
Dan Glickman, president of the Motion Picture Association of America,
offered similar warnings. "If the broadcast flag cannot be used,
program providers will have to weigh whether the risk of theft is too
great over free, off-air broadcasting and could limit such
high-quality programming to only cable, satellite and other more
secure delivery systems," he said. "It is important to remember that
this decision is only about the F.C.C.'s jurisdiction, not the merits
of the broadcast flag itself."
But Gigi B. Sohn, president of Public Knowledge, a digital rights
advocacy group that led the fight against the broadcast flag rule,
warned that intervention by Congress could create a new set of
problems for consumers and innovators.
"If Congress starts to go down the road of giving the F.C.C. broad
power over new applications and technologies, who knows what comes
next?" Ms. Sohn said. "This case is about the future of technology."
Government officials and industry executives report that digital
television has slowly been gaining in popularity. Nearly 1,500
stations, or about 90 percent of the total, now broadcast some
digital programs. Industry executives project sales this year of
about 15 million television sets able to receive digital programs,
about half of all sets sold. Indeed, some sets already being sold are
equipped for a broadcast flag.
Cable televisions now have the ability to sell digital programs to as
many as 90 million homes, and about 300 hours of digital programming
is available each day in many markets.
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